Optimum Communications, Inc. (OPTU) Earnings Call Transcript & Summary

Okay. Good morning, everybody. We're back. Again, I'm John Hodulik, the media and telecom analyst here at UBS. And I'm very pleased to announce that our next -- our launch, our first launch keynote speaker is Dexter Goei, the CEO of Altice. Dexter, thanks for being here.

Good morning, John. Thank you. Happy to be here.

So we've got about 40 to 45 minutes for the presentation. And anybody that has any questions, please log in to the app and show them over to me, and I'll be filtering them into the conversation. So Dexter, again, thanks for joining us. Obviously, it's been an eventful year for Altice USA, and the company is focused on jump-starting growth and reinvesting in its cable business to do so. Can you give us a sense of the steps the company needs to take to restart growth in that business?

Yes. I mean listen, we've been pretty explicit over the last couple of years about accelerating CapEx in general in terms of a focus on the fiber build and the upgrades in the Suddenlink territory as well as new edge build-outs. What we've announced in the last, I guess, 3, 4 months is that, that acceleration has taken an uptick in terms of its pace. We're planning on doing about 1 million fiber homes this year in 2022, looking to up our edge-outs to something higher than 150,000 for next year. And really gearing up also to 2023, where we'd like to sustain that base, if not more, so that we could complete the bulk of the fiber, if not all of the fiber build that we intend to do in the Optimum footprint and then just be selective about our CapEx going forward. Some of the new things that we had talked about in the last 3, 4 months is reinjecting investment back into our distribution channels, focusing on our products; and we talked about our mobile product in particular, which we'll "relaunch" in the first quarter of next year and be able to be a lot more thoughtful around how we bundle those products. And lastly, investing selectively in some care functions across the board. But very focused on CapEx and distribution in particular, with products really just a function of time.

Got it. Can you bucket the size of these spending product categories? You have a couple of sort of CapEx categories and some OpEx categories. Maybe starting with the OpEx side of things, where exactly are you spending the dollars? And maybe sort of what do margins look like as we go through this process?

Yes. I mean, listen, I think we've spoken about a rebranding exercise next year at Suddenlink. That's a $20 million to $30 million type of a cost. That's a one-off. We've got the retail store distribution side, where from today onwards, going to next year, we're opening about 75 stores. 25 of those were part of the '21 exercise, but they're getting delayed into the beginning of next year, and another 50 going into 2022 as far as our '22 budgets. So 75 new stores in total, which is really driving kind of $20 million to $30 million type of run rate OpEx next year, going to probably slightly higher in '23 as we'll have a full year of personnel on board for that. We also talked about our door-to-door distribution, which is probably a $15 million to $20 million investment into personnel as we double, if not more, our door-to-door personnel, particularly in some particular markets. And then it's mobile, right? It's -- on the mobile side, the "relaunch" of it and some cross-promotional is probably another $20 million to $30 million extra. So we're looking to a $125 million traditional OpEx in September, [indiscernible] is something that's quite variable depending on how we're going to do it, so -- and that relates to the rebrand and some of the mobile things. But all of the cost around customer care and distribution channels are pretty fixed, right?

Yes. So I would imagine a lot of these costs are sort of ramp up before you start to see the revenue benefit. So should we expect some pressure on margins in the interim? And then you hit a point where that -- it starts to take hold and then you start to see margins expand...

Yes, I think that's right. I mean if you look at kind of where we're going to land this year, we're probably somewhere around that 44% EBITDA margin including the AirStrand revenue, lower if you exclude the AirStrand revenue. We're probably going to be in that 41% to 42% range for next year. We haven't given guidance explicitly on EBITDA [indiscernible] going forward but [indiscernible] give some good structure around where we are. You guys see where we're trending just in terms of revenues with the increased OpEx and the increased CapEx. You try and get to a free cash [indiscernible] that's within the ballpark in terms of where consensus is, right? So we'd obviously look to hopefully beat the consensus out there, but those [indiscernible] and then you go into 2023, rightfully so, retail distribution, door-to-door, [indiscernible] the ramp-up on mobile spend in terms of marketing starts paying off. And we've got a lot more of a bigger footprint in terms of the CapEx spend in '22, we should see some accelerated growth in 2023, right? So it's a 1-year dip, [indiscernible] going into 2023.

[indiscernible] before we move on here, let's talk about the CapEx budgets. Yes, essentially, 3 categories that you mentioned: fiber-to-the-home, edge-outs and upgrades. Maybe starting with the fiber-to-the-home [indiscernible] million homes [indiscernible] seeing in that? And any change in the cost of deployment or supply chain issues that we've heard from some other companies, and just any update there.

Yes. I mean listen, I think the bulk of it is from fiber-to-the-home and edge-outs, right? If you're looking at kind of, let's call it, a $500 million increase in CapEx spend, most of it is related to fiber, [indiscernible] in permitting because of certain states having a more of an oversight on permitting from a statewide level as opposed to community level. But that's in our budgets pretty clearly. And we expect to do that for the next couple of years, target 1 million, 1 million-plus of fiber-to-the-home. So we've ramped up from 500,000 this year, targeting 1 million next year. And probably, if everything goes as smoothly as we expect, is to do a little bit more in 2023, which will complete pretty much our Fios footprint and then some on the Optimum side and allow us to be opportunistic going forward if we need to invest in fiber and in other areas but in much smaller scale, and then really focus on the edge-out strategy and that capital. So our capital intensity in 2024 should be coming down, and then meaningfully in 2025.

So it's elevated for '22 and '23, and then comes down in...

Yes.

In '24. Okay. And just finishing with to fiber-to-the-home, you're still feel very confident about the payoff from this investment. I mean, you're seeing better penetration, maybe better ARPUs associated with the fiber customers?

Yes. I mean listen, I think this is a medium- to longer-term strategy. We've never said this is going to be short term. We're going to be running parallel networks for quite some time. But the gross -- where fiber is available, 75% to 80% of customers in those areas on gross adds are taking fiber. We're about at 5% penetration. We expect to be in high single digits next year with -- on a larger footprint, right, much larger footprint as we add an extra million homes. We've seen technical incidence rates down 80% to 90%. We've seen survival rates relative to HFC be better in the short to medium term. Again, we're in a small subscriber base, about 60,000 today. But all of the proof positive points that you would expect, better performance, less technical issues, less customer touch points into your call centers and better survival rates, which means better churn rates, you completely expect, right? In terms of the ARPUs today, we're not differentiating between cable and fiber in general. Depending on -- maybe there are some differentiated depending on some certain zones, but by and large, it's pretty homogenous in terms of our price points. But the product road map is extensive, right? And so as we go into multi-gig territory next year and beyond, [indiscernible] performance matrices become materially different between the 2 technologies, you'll start seeing the real OpEx savings and revenue uptick in terms of being able to drive higher ARPUs. It's going to take time on it, but we are very confident that this is the right strategy we should be doing in our footprint, particularly in the Optimum footprint, and continuously to selectively do that in certain Suddenlink footprints. Particularly our edge-outs, we're all going to be doing fiber-to-the-home on our edge-outs. So not to have to duplicate technologies there. And then selectively, do some fiber where we think it makes sense in the Suddenlink territory. But the -- we're not the only ones who keep on saying that fiber is better than HFC out there and that the performance matrices are clear. And so we'll continue to drive that, and I think we'll see the nice payouts over time.

Great. Maybe before we move off CapEx, just a little more on the upgrades in the Suddenlink territory. Maybe first, could you comment on sort of what your HFC penetration is in the Suddenlink territories that are not upgraded? What are the costs you were looking at in terms of per homes passed to upgrade a home? And again, where can those -- what's the upside from making those [ passes ]?

So we're going to do about half of our 600,000 to 700,000 this year. I think we're trending towards close to 300,000 of our upgrades. The remainder of the 300,000, 350,000 that need to be done, those penetration rates are around 20% to 30% from a customer penetration levels and are skewing very low in terms of the broadband performance in terms of what we can deliver. The initial low-hanging fruit of the first half that we've done this year has been a couple of hundred dollars for the upgrade. That skews meaningfully higher for the remainder of it. And so we probably are pausing a little bit in 2022 as we accelerate fiber and edge-outs. And the entire subsidy availability has accelerated massively, and a lot of those subsidies are available in the second half of our upgrade areas, right? So we will be doing some upgrades, but probably with some subsidy money and rebuilding the network as opposed to just trying to upgrade and release spectrum there. So I think it's really -- it's going to be -- we'll probably be completed with our full upgrade of the Suddenlink territories by 2023 as opposed to 2022 as we look to take advantage of the subsidy money here because a lot of it is some rebuild, which is driving cost kind of like $1,000 to $2,000 a home, right?

Got you. And how big an opportunity is the subsidy money from the government? Is that a...

Well, I think we -- in our territories that are contiguous to our areas, we suspect there's probably $1 billion of subsidy money to go after if we were to apply for all of the availability. The low end of that is probably $500 million. We've already applied for $150 million of subsidy money in the last month, 1.5 months. And so we probably, in the next 6 to 12 months, have another, let's call it, $500 million plus of applications to go through. I can't give you -- I keep on asking my teams to handicap what we think our success rate would be. It's very difficult. But these tend to be areas that are contiguous to some type of head end of ours that's not too far away. So we tend to have a capital advantage, obviously, in terms of our ability to deploy more efficiently and to co-invest more aggressively alongside the subsidy money in the states there than other people. There will be areas, obviously, where we're going to compete with other third parties, depending on where we are. But I think we feel pretty good about the ability to -- if we're getting -- if worse -- if we're getting $150 million of subsidy money, we're probably spending an extra $100 million of capital type ratio, 40-60 type range there. But then our cost per home is probably in the couple of thousands which is what we're paying anyway in average for new homes built, right? So our net cost to us is not more but it's significantly obviously improved between our network more aggressively. And so the $150 million, as an example, of subsidy money that we went after is about 55,000, 60,000 homes. So that could help to change some of the, let's call it, the edge-outs numbers in terms of the acceleration of edge-outs in terms of our ability to deliver more homes.

Makes sense. All right. I think that's enough on the CapEx side. Maybe we can talk a little bit about broadband trends and customer growth. And obviously, both the pandemic and increasing competition has really made it difficult to sort of predict what you should see in the future. But at this point, you've got a number of initiatives in place to reignite growth. But do you think that the 13,000 subscriber declines we saw in the third quarter is as bad as it gets? Your outlook suggests sort of positive answer for 4Q. So does that still hold? And any commentary you can give us of what you're seeing in the fourth quarter?

Yes. I think, listen, similar to some what of our peers are saying, it's a little bit of a difficult prognostic out there. Through 3Q, we were down, I think, about 1,000 broadband net adds. We're hopeful to be positive in Q4. We probably are trending, and we still have a big month of December coming along. We're probably trending up being slightly negative in Q4, which probably leads us to be down, let's call it, on a range of 5,000 to 10,000 for the year. That could skew. That's probably the lower end of our estimates right now. But we've -- gross adds have meaningfully improved. Churn tends to be still a little bit difficult to predict. We -- the non-Fios zones continue to grow. These losses are in the Fios zones. I think Fios has been has also been saying that they have not lost momentum. We've slowed the momentum there relative to Fios. And we really need to drive to the first quarter when we have a better mobile product to be able to offer. And Fios continues to be heavily, heavily promotional, as you know, on its fixed broadband -- fixed and wireless, sorry, product out there. And it is what it is. But we're not seeing an acceleration; we're seeing a deceleration across the board as we would have expected given that we've been promotional. We've done some material movements in our quality of our products and our network and our service and really need a couple of quarters here going into 2023 -- sorry, 2022 where we expect to ramp up going into the back end of 2022 as we start delivering the CapEx and some of the initiatives on distribution.

So you expect trends to remain under pressure until some of these, I guess, both OpEx and CapEx things kick in and a different sort of trend in the back half of the year?

Yes. And I think we're -- we've got building blocks, right? And building blocks take time to deliver. Those initiatives have been in place for the past 4 months. We're there on the CapEx. We feel pretty good about our ability to deliver on our CapEx plan for 2022. And if we deliver on 2023, we'll deliver 2023. So that's well underway. Being able to rebuild some of the distribution on door-to-door and retail just takes time, right? Retail stores open 9 to 12 months after you've kind of pushed the button to go. Door-to-door also, a tight labor market out there. And so those initiatives are well underway. We'll start seeing some material impact in the first and second quarter of next year, which obviously will drive numbers in the third or fourth quarter of next year as we go. And then on the product side, as we've mentioned, it's a January, February on mobile. Relaunch and rebranding will happen sometime in the middle of next year on Suddenlink. And so -- and on the fiber install process, we've already reduced the time to install by about 40% in the last 4 months. So that whole installation rate -- our completion rates on fiber have been around the mid-80s, which is our highest ever. And as I mentioned earlier, our technical service calls have been 80% to 90% lower, and our survival rate's been better. So all the right building blocks are in place. It just takes a little bit of time for some of the spend to open and to drive revenue going forward, right? So we're going to be patient here. We know we've done all the right things here to deliver on 2022 and beyond and to drive financial KPIs higher in 2023. And operating KPI is a lot higher in 2022.

Yes, that was comprehensive. Maybe before we leave broadband, let's dig down a little bit maybe into the sort of competitive aspects. Can you give us a sense of how much of your footprint overlaps fiber-to-the-home infrastructure from the telcos today? And given the buildout plans, do you have a sense for how that grows over the next few years?

Yes. So I think we've got 5.5 million homes. 5 million homes in Optimum. 60% of that, 65% of it is overbuilt by Fios. So let's call it, 3.5 million homes type ballpark. And on the Suddenlink footprint of 3.5 million homes, we've got about 20%, 25% of it overbuilt by fiber providers, of which half of it is AT&T. We've been thinking about this, obviously, internally, and we suspect we're probably going to be at 40% to 50% overbuilt in the next 5 years in the Suddenlink footprint. Now I suspect that's probably execution to perfection amongst some of our competitors. I suspect some of the financial players probably get derailed given what's happening in some of the competitive markets in terms of labor as well in terms of gross add ARPUs. But that's probably a conservative estimate, that 50% of our footprint gets overbuilt in the next 5 years.

Got it. And then the other category is fixed wireless. We heard from T-Mo and Verizon. I'd imagine that there's not much fixed and wireless from Verizon in your footprint because of the high level of fiber. But are you seeing anything from T-Mobile, especially in some of the more suburban and rural markets that you guys cover on the suburban side?

We haven't. We haven't. Obviously, if you look at the performance matrices where our subscribers, 50% of them are taking less than 200, but 50% are taking higher than 200. On average, we're about 350 in terms of download speeds. In terms of downloaded data, we're probably doing mid-400s gigabytes per month in terms of our average data subscriber and closer to 600 in terms of our single play. In our price points on the 300-meg product at $29.99 plus a modem today is very competitive with any type of fixed wireless option. I think it's really 50, we're hearing 50 megs for $50. So it just doesn't make a lot of sense for somebody to transition to a fixed wireless option today if they have a fixed option available, whether it's us or someone else out there. And when we're speaking about specifically Verizon, Verizon's fixed wireless products not competing its Fios product, right? So -- and then the rest of our Optimum footprint is 1 gig ready and obviously delivering price points that are very attractive. So I am -- today, I don't want to discount obviously the technology capabilities of a fixed wireless options, but they're vastly inferior relative to what we can deliver on fiber and even more inferior as to what we can deliver over fiber -- sorry, coax and then over fiber. So today, we're not seeing any impact.

Got it. So lastly, on the broadband business, you guided to a flattish ARPU for next year. Do you think you can go back to growth beyond what seems to be a transition year even with competition, as you said, from fiber ramping up? I mean just how do you see ARPU trends move longer term?

Yes. No, listen, we've guided towards flattish ARPU because if you look at our promotional rates today, we're probably the most aggressive from a promotional standpoint out there. And so if we were to stay promotional for the entire year, which is very unlikely, we would end up being flattish from an ARPU standpoint. So we think that, obviously, one, we won't be promotional for the entire year. And secondly, as our subscriber base continues to be 50% at 200 megs and below, and our ability to deliver multi-gig next year over, let's call it, a couple of million homes, we start having runway for ARPU growth going forward, right? So we feel good that ARPU trends, however, slowing down, they may be -- we'll continue to have at least some momentum to be able to stay flat to grow over the next years to come.

Got it. Let's turn to wireless. You talked about that being one of the sort of spending initiatives to relaunch that mobile business in 1Q. How important is converged connectivity to compete in the marketplace going forward, putting broadband together with wireless? And should we expect to see that kind of messaging from you in the marketplace of that funnel?

Yes. I mean, listen, we've been proponents of convergence for a long time in terms of what we think consumers will gravitate towards. Every single developed market in the world has big converged players where 40% to 50% of subscribers are quad-play, let's call it. And we don't see why the U.S. won't follow suit. Now there are some peculiarities with the U.S. one, there's no national high-speed data provider. And there's -- and frankly speaking, from a wireless standpoint, certain wireless players are better in certain markets than others, right? So even though they cover 100% of the country or 99% of the country, certain markets are more beneficial to others in terms of that. So you do have this kind of hybrid puzzle in terms of seeing what the convergence is going to come from. So you'd be surprised to see 40% to 50% convergence here in the U.S. But there's clearly going to be room for accelerated convergence. There's a reason why Verizon is so aggressive on its double play because it finally has seen a lot of stickiness over the last 18 months. AT&T has not followed suit yet, but continues to be highly promotional, really on its postpaid product there. And T-Mo today doesn't have a fixed line product, right? So we're talking about fixed wireless options. But that clearly is probably something from a strategic standpoint where you'd expect T-Mo at some point to have some type of fixed solution, whether it's organic or strategic in terms of where it goes. But there is benefits. Consumers are responding to it. Consumers are obviously responding to the cross-subsidizations and it's really driving churn benefits. So we've seen that in every single market. I think our peers in the cable world, Comcast and Charter, have said that there are material churn benefits there as well, and we believe them 100%. So we'll follow suit, and we'll see where it goes from a strategic standpoint. I think this drives strategic activity by definition.

Right. Yes, agree. So maybe can we talk about, I guess, 2 sides. One, do you think you have the right sort of mobile/broadband bundle in place? Or any color in terms of how that could have [indiscernible] next year with the relaunch? And then two, can you talk about profitability of that wireless business, especially as you opened the 50 stores and you ramp marketing, I mean, how should that impact overall profitability? And I guess, I would imagine that, that was covered in the sort of margin dilution that we talked about with this 1-year dip in '22?

Yes, I think that's right. I mean, listen, I think what's clear is we'll be able to bundle appropriately and be competitive on bundled pricing relative to our peers who provide similar double-play products between fixed and wireless as of the first quarter of next year. In terms of costs, we kind of -- I threw out a $30 million-ish type number associated with mobile next year. This year, I think we're probably in the minus 50 to minus 60 level in terms of EBITDA. So you're probably in that minus 100, let's call it, in terms of round number next year. It's a little bit misleading. It's probably the same as some of our cable peers because a lot of it has to do with allocations. At the end of the day, when you're promoting Optimum Mobile, you're promoting Optimum as well. And you're probably not -- it's not incremental spend for mobile necessarily. It's just a redirection of mobile spend. So I would really think that the true cash costs associated with mobile is probably half of what is reported because the accounts look for allocations. But the true accounting number, yes, it's about probably minus 100 next year and getting significantly better in 2023 onwards, right?

Got it. And maybe moving off of wireless, maybe just quickly on video. How do you see video trends playing out in 2022? Do you expect sort of similar losses than what we've seen this year?

Yes. I think in general, we're predicting probably even maybe higher losses as consumers continue to start pivoting towards more OTT-driven viewing habits. But who knows, but high single digits has been kind of the range? This year, we're probably in that 220,000, 230,000 type subscriber loss on video. We may be higher next year. Obviously, as the denominator gets smaller in terms of video subs and if we start seeing higher churn rates on video, then the percentage number probably goes up. But we can't predict if that will happen, maybe we'll do better than that. But I think that's what we're throwing into our budget this year, is slightly higher.

Got it. And then on the business side, you've got a roughly $120 million headwind related to the AirStrand revenues that go away. How should we think of -- outside of that, how should we think about underlying business trends? Can the 2.5% growth that we saw in 3Q accelerate as we look out into '22?

Yes. And we're seeing that 2.5% revenue growth number being very solid, good momentum in our SMB business. Lightpath in itself, as it continues to develop its more medium- to longer-term strategy in terms of investing into more assets, is flat. So the SMB business is really driving the growth. We expect to be in that same range in 2022 going forward. There's a lot of initiatives. Obviously, fiber is helping there in the rollout, the distribution decisions that we're doing on the consumer side are going to help the business side as well there. So we feel good about maintaining, if not, hopefully, accelerating those trends a little bit on the B2B side.

Got it. So from a revenue standpoint, you're putting all these piece parts together. We've got revenue declining sort of low single digits in '22 with, I would say, with a percent of that coming from the [ Strand ] amount. So does that make sense? Is that sort of in the ballpark? And again, as we're talking about the new initiatives, you're having sub growth improving in the second half. Can we expect to sort of better trends coming out of '22 as we look into '23 and potentially return to growth that year? Or just, I guess, trying to get a sense for how long the air pocket is going to be.

Yes. I mean the great thing about being a December conference, John, is that you're right in the middle of the budget period, so it's a good timing. But you're right. We're in that low single-digit numbers in terms of revenue decline next year, which kind of drives to mid-single-digit declines in EBITDA, particularly as you include the AirStrand revenue in there? And yes, the objective is operational KPIs are improving. They're improving from Q3 to Q4 already. We expect that trend to continue into Q1 and Q2 as we start releasing product, and we expect it to accelerate to Q3 and Q4 of next year as we're starting to really increase on the distribution channels, right? I mean that's really the organic moves, and then the capital moves that we're doing in terms of building out more fiber and more edge-outs and the subsidy money that we get, that all will start delivering in the second half of next year as well, right? So we are moving towards better operational trends already. We also -- we see it in all of our customer service numbers as well, whether it be responsiveness from our customers in terms of NPS scores or any other types of poles or related to interactions with our TSR and CSR, which are materially down. So it's a building block of quarters and not years that are -- that we're executing right now. We've been at it for the better part of 4 months already. And so we feel good about 2022 in terms of what the trends are. And to your point, the air pocket is in 2022, and we expect to go back to growth, both on top line and EBITDA in 2023.

Got it. Just it sounds like you may have the internal plan there in front of you. Any additional granularity you can give us on -- in terms of when you start to see EBITDA trends start to improve? I mean, is that a first half event? I mean, the declines in EBITDA that we're forecasting here in the fourth quarter, is that as bad as it get? Or is it sometime midyear when we start to see improvement in that?

Well, it's difficult to do this on a call like this because yes, you've got revenue impacting EBITDA in the fourth quarter year-over-year. You've got investments in OpEx that are coming online regularly over the first 6 months next year before you start driving uptick in revenue in the second half of next year, right? So that's kind of the thing. I'm not predicting that we're going to be revenue growth year-over-year, quarter-over-quarter on Q3. I'm just saying the curve is you've got revenue declines that are driving -- that are coming into Q1 and Q2 of next year that are just mathematical on the back of Q3 and Q4 here. Simultaneous investments in OpEx going in now through to the first half of next year and onwards before operational KPIs start catching up and driving revenue growth, right? So just the trend is going to be a trough probably in Q2-ish type levels in terms of absolute numbers and then we're starting to pick up in Q3 and Q4.

Makes sense. So even after the spending both on the CapEx and OpEx and the EBITDA impact that we have following out of that, we still have generating almost $1 billion in free cash flow in 2022. Should we assume the majority of that -- the $1 billion goes to debt paydown and the buyback can resume once EBITDA returns to growth? How should we think of use of cash...

Yes. I think that's the same way to be running your balance sheet, John, which is if you are declining, even if it's a onetime event on EBITDA, you should be focused on your balance sheet and deleveraging, right? And when you go back to EBITDA growth, you can start thinking about how you're going to redeploy your capital into other type of capital allocation decisions, right? So that's the plan today. We've always said we'd be opportunistic to the extent there needs to be situations to be opportunistic. But the base case plan is we should be deleveraging with our cash flow.

Makes sense. And then to the extent that operational improvements take longer than expected, and that is reflected in the shares, does taking the company private make sense to improve the flexibility or maybe -- to maybe invest more if need be or to improve how the assets are managed?

I mean, I'm not going to predict the future here. We obviously I think, agree with many people that we think the stock is cheap. It's not being properly reflected because it's a very short-term KPI and financial-driven reaction as opposed to medium to longer-term value in terms of what we think the asset is worth. But I can't predict where we are. We do know that we've got a very solid balance sheet. We've got no material refinancing since 2025. So we've got a lot of flexibility as to what we can do with our balance sheet. If the opportunity comes up for a big strategic transaction, whether it's a self-strategic transaction or something outside of our footprint, then that's something we'll obviously look at, at that point in time. But that's not the focus today. We're extremely focused on the operational side of the business. And give us a couple of quarters here because all the trends are pointing in the right direction.

Okay. Perfect. Dexter, I think we should leave it there. Thank you very much for your time. We really appreciate it.

Thanks, John. Take care.

Okay. Take care. Thanks for joining us, everyone.